Financing your bucket list

This is a guest post from Mitch Anthony. Mitch is a sought-after financial services consultant, popular speaker, and host of The Daily Dose radio program. His RetireMentors column appears regularly on CBS marketwatch.com. Mitch earned Financial Planning Magazine’s â€œMover & Shakerâ€ award for his pioneering retirement and financial planning work. He has been quoted in The Wall Street Journal, Kiplinger’s Personal Finance, and The New York Times. His book Storyselling for Financial Advisors was acclaimed by Financial Planning magazine as its No. 1 essential read.

Most of us, if left to our whimsy, could conjure up a pretty impressive list of adventures to attempt before we kick the bucket. In the film â€œThe Bucket Listâ€ two men were able to check items off their life’s to-do list that most of us can only fantasize about. That’s because Jack Nicholson’s character was rich enough to grant both his and Morgan Freeman’s wishes. However, extravagant experiences don’t have to cost a fortune.

By focusing solely on money, you risk living a life without soul.

One of the richest experiences of my life was a road-trip I made with my son after he graduated from college. He had landed a job in Fairbanks, Alaska. His job started the first week of January, which meant we would be driving the great Alaskan Highway during the week between Christmas and the New Year—a 56-hour drive in potentially treacherous conditions, pulling a trailer with all his worldly possessions in the dead of winter. We stayed at cheap hotels and ate at Subway for dinner. My back was killing me after almost 60 hours in a cramped truck cab. It was one of the best experiences of my life.

Mitch and son

While money is an essential and obvious component of financial planning, specifically retirement, it is not the only component. By focusing solely on money, you risk living a life without soul. In my work with financial advisers and their clients, I show them how to implement experiences into their financial plans—financial life planning. Financial life planning focuses on learning how to live the best life you can with the money you have.

The biggest mistake people make when thinking about retirement planning is treating it as a finish line instead of a starting point. There are four cornerstones that help you plan ahead so you can spend time on your own bucket list, and enjoy what’s ahead.

1. Have a realistic vision.

Vision is important because successful retirees retire to something—failed retirees retire from something—usually a job they hated. If you don’t have a clear vision of where you want to go, you’ll end up at a dead end. In my book, I provide an exercise in which participants select six pictures that represent what they envision during retirement. It’s a simple exercise whose purpose is to start a conversation. Most people quickly realize that what they thought they wanted (all leisure, all the time) is a myth. You can do the exercise without the book: just choose six images from a magazine or website that represent how you see yourself in retirement. Some examples include mentoring, teaching, traveling, working, and spending more time with friends. As you can see, some of these examples cost money, some are free, and some even pay you!

2. Include balance.

Balance is important because successful retirees find balance between vocation and vacation, and failed retirees go from bingeing on work to bingeing on leisure.

Whether you rely on Social Security or have billions in the bank, we all have exactly 168 hours per week in our time accounts. No matter how much money you have, if you do not have a plan for capitalizing on your time, you will be miserable. Figure out how you’re going to spend your time. Step one is determining approximately how and where you currently spend your time (total must be 168 hours). Step two is the same, except it focuses on how and where you desire to spend your time (again, total must be 168 hours). Here are the time categories you should include in time totals:

Activity

Hours per week

Family/friends

Work/career

Downtime (television, social media, music)

Sleep

Health/fitness

Personal growth

TOTAL HOURS (must equal 168)

168

After completing this exercise—especially the desire version—many people have told me it opened their eyes to realize that they really don’t want to spend all their time posting on Facebook, drinking martinis, or playing golf. They also acknowledged that much of what they wanted didn’t have to cost them a fortune. What they really wanted was more balance!

3. Go from collecting a paycheck to a playcheck.

Work is important but not necessarily for reasons you may be thinking. Many of us will have no choice but to work longer than our current plan. However, I have observed that the most successful retirees keep themselves plugged into meaningful pursuits, and failed retirees devolve into boredom and aimlessness. If you’re not spending your time doing something you find fulfilling, it’s time for a career assessment and transformation. No, it’s not easy but it is doable. While most people don’t conduct a work assessment before retiring, a high percentage end up taking on part-time work within the first year because they were missing out on positive aspects of work like social interaction and purpose (even if they didn’t like what they were doing before retiring). Maybe it’s time to think about transitioning a hobby into a for-profit business, or your knowledge base into a consulting practice.

4. Age successfully.

The final cornerstone in planning for how you’re going to spend the rest of your life is to shift from growing old to successfully aging (what I like to call â€œs-agingâ€). S-aging is important—successful retirees focus on growing and well-being, and failed retirees just take what comes. Successful aging is all about attitude. I’ll bet you know someone who is 80 years old but acts like they are half that age, and vice versa, someone who is 40 and acts like they’re 80. You’re old when you think you are. Just because you’re not 20 years old doesn’t mean you can’t be curious, challenged, connected, creative, and charitable. The payoff is better health, which ultimately means more money in your pocket and a better lifestyle.

Think of retirement as a life transition.

Retirement as traditionally defined is an unnatural act. When it was first instituted, retirees very seldom lived more than a few years into retirement (if they made it to retirement at all). Today, retirement is a life transition to other work, less work, or very little work. It’s an opportunity to focus on those bucket list items we may not have gotten to yet. Both money and emotional issues accompany this transition and need to be dealt with. Whether you work with a professional or do your own planning, it is essential to recognize that retirement is not just an economic event. If you do choose to retire, financial preparation becomes just one aspect of a life event. Having your life ledger in balance can help you focus on just how much money you really need—instead of focusing on an arbitrary number that may not be an accurate assessment of what you really need.

How do you envision the next stage of your life? What’s on your bucket list?

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I manage the balance between my retirement/ financial goals and my present/play goals by using a percentage system to divide my income into expenses, savings, investments, and play. I don’t make a ton of money, but even setting aside 10% of each payday affords me the opportunity to socialize, travel, and accomplish personal goals.

This post really resinated with me (I read it 3x to make sure I didnâ€™t miss anything!). I like the overall theme of â€œmindfulessâ€ and I love learning different ways of looking at things; I think everyone becomes better for it. I mention mindfulness a lot because I feel that as a society we have become more complacent in the activity of planning our lives, especially retirement. Most of us live in a service-packed culture where we are used to having things done for us, including our thinking. For many Americans ss and the 401k/IRA are set up for them through the gov and their employer and thatâ€™s where it ends, we can check retirement planning off the list.

These quotes will be staying with me for a long time:

â€œThe biggest mistake people make when thinking about retirement planning is treating it as a finish line instead of a starting point.â€

I like the idea of the visualization exercises. Itâ€™s amazing how many people need to actually be coaxed into daydreaming (a very healthy activity by the way).

â€œâ€¦successful retirees find balance between vocation and vacation, and failed retirees go from bingeing on work to bingeing on leisure.â€

PREACH. Iâ€™d take it a step further and say the â€œebb and flowâ€ approach to work and leisure can be a good method even prior to â€œretiringâ€â€¦to the point where there isnâ€™t a set time in your life that you retire; you just happen die before you have a chance to get back out there :)

The time account analogy is genius. My mind is blown; Iâ€™m a to-do lister and this is right up my alley. With my schedule the way it has been itâ€™s been easy to forget about incorporating some important things in my life and I really need something like this. I know what Iâ€™ll be doing on my lunch break today!

The life I envision for myself (within the next 10 years) is one where I work consistently with long breaks in between; ideally a 50/50 balanceâ€¦working a total of 6 mo/ yr and well, not working 6 mo/ yr unless I wanted to. And this would likely continue as I reach older age except maybe the breaks will become longer. This means I would be relegated to seasonal, contract, or assignment type work which is fine for me because I tend to get bored. This fits my personality and the lifestyle I want.

But “resinate” is even better since it implies, not a psychological connection to something, but an actual physical connection that is sticky and hard to dispel. You probably intended the contrast as you wrote. Or not.

I kept staring at that word too because it just didnâ€™t look right. I even Googled it (thatâ€™s my spell check b/c it usually offers to search the correct word). Since â€˜resinateâ€™ is also a word it didnâ€™t catch it, but after reading the definition I thought what an odd definition for â€˜resonateâ€™ but itâ€™ll do; it didnâ€™t even compute it was totally different word.

I say the word a lot but obviously rarely write it. I cringe at the errors I make on hereâ€¦I see most of them I just donâ€™t care to go back and fix them most of the time. Iâ€™m a free-writer and tend not to pay too much attention to grammar until after, lest the extra thoughts mess up my â€˜flowâ€™. If I ever do attempt to publish books I feel badly for my editor.

Glad the message resonated with you. If we would treat our lives as if they were the greatest investment we will ever make, we would probably allocate our time in a different fashion. Invest your life well!

I see! Well it’s nice to find a fellow Ivorian around here. I really did enjoy your comment, especially because my bucket list is quite similar to yours, except that I’m only shooting for 6 languages :)

I enjoyed this post. I’ve been feeling extremely nervous and even opposed to having an early retirement plan. But I think I’ve been too focused on the money and less on the time – I need a balanced plan to offset this anxious feeling of “What will we DO?!”

This post inspired me as well. I love Imoot’s comments. My immediate thought was, “I want a friend like that!” And it goes to show that people who are continually looking forward, and planning LIFE are simply more interesting. I read the first edition of Mitch’s book (New RetireMentality) and it seems to have gotten even better. Thanks for pouring out your heart in the area of personal finance, Mitch. (As a side note to Imoot’s remark about language fluency, I’ve always wanted to conquer Pig Latin, so maybe I’ll try that with my kids today. Ha!)

heh, thanks Robin. Though most of my friends would probably tell you I’m annoying, ha! I used to be a negative nancy; boy that got old quick. Not having something to look forward to, even for a second, just zaps the energy out of you.

I have a goal to retire by the time I’m 45. I need to better plan out exactly what I’ll be doing after that age. I do NOT want to just sit around the house all day, but I do want to work when I want and not be tied down. This is definitely a good article to help bring all the pieces together.

Lately GRS has had some really good posts, but this is the best of 2014 to date. I have just printed this off and put in my “articles to reread, ponder, and work with” pile. Many thanks to Mitch for writing such an excellent article!

This reaffirms for me that my goal to stay employed as long as possible but eventually downshift from FT to PT is a good one (I like my admin job, and if finances permitted, could easily drop from FT to PT now). Other admins here want to retire ASAP and think I’m crazy for wanting to taper down, but they’re retiring from the job instead of to something more meaningful. I’ve always seen myself decreasing my job work hours and spending more time on personal development, as well as getting a MFA so I can teach something like Comp101 PT (yes, as a deeply underpaid adjunct, I know what I’m in for; this would be in tandem with the PT admin job) and maybe some volunteer literacy tutoring/teaching.

I definitely want to take some time and complete the chart in #2. Very thought-provoking. Ultimate goal: to “Sage,” not age!

Thank you for writing such an inspiring and thought-provoking article. I am approaching 40 and this article really made me realize retirement is something to work toward for better reasons than we have been traditionally raised! And I love the notion that it’s not ALL about money and that even with “less” you still gotta make do! For now, my bucket list would include more international travel, writing a book, and…. Who knows! As for what my life in retirement would be, it would be intentionally living with gratefulness, a deepened sense of purpose, a mix of happy solitude and robust, meaningful social life, optimal health, all intertwined with part-time work and a healthy nest egg to support it, too! Freedom. A life well lived. Joy. Clarity. Ability to still take risks and grow.

I am two months away from retirement from a 30-year academic career of some, minor note.

I never over-identified with my job, so I have some room to rumble in creating a future identity. Supposedly “identity loss” is a real killer in retirement.

My wife and I instituted voluntary simplification before the term existed. We have lived a functional state of consumption for 30 years and it has paid off. We do not scrimp, but we dumped credit cards long ago and found real cash flow available thereafter.

I think the one thing to be aware of remains that retirement is a psychological transition in state-of-being. If one’s SOBing is in good order going in and one has paid some attention to finances for a decade or more….that things can work out well.

As to bucket lists……..just another high intensity, mass media con-job designed to separate you from your prosperity.

I work really hard at my job, but at the end of the day I view it as a means to an end. My bucket/life list is pretty expansive and broken into different sections (personal, professional, financial) and terms (current, 5 years, long-term).

Anytime I see a post or article about bucket lists or to-do lists my shiny object syndrome is brought to an immediate hault…you have my attention.

One result of busting my a$$ starting right after graduation is I never took the time to go cross country as many of my friends did after college. I don’t have room for regrets so I find ways to make things work for me. 3 of my favorite life/bucket list items work hand in hand in this regard:
1. Go cross country (every time I see or read about an interesting place I add it to the list of where I would like to visit on this journey)
2. Through-hike the Appalachian Trail
3. Save a large enough emergency fund so that losing my job isn’t an “emergency”.

I accomplished goal #3 over the past few months. I’m big on visualization and have actually visualized what my reaction would be if I was told I was being laid off. While I imagine most people might be devastated in worry, I know I would have a huge smile on my face because when that day comes it would be time for goals #1 and #2 to happen sooner rather than later.

I feel the same way about traveling around Europe. I know several people who did the “backpacking around Europe” thing in their early 20s, but at the time I couldn’t even afford the plane fare (or afford to leave my job for several weeks at a time). World travel is definitely on my bucket list!

Retirement has been and will be a very slow trickle down process for me. At 35 I will never be able to work full-time again in the foreseeable future and I manage to squeeze out 20 hours a week. Ever dime I manage to save goes to out-of-pocket medical experiences (there’s a LOT insurance doesn’t cover) so bucket lists sounds like a luxury to me. With that said I do want to make it happen. Great post!

I am thirty years old. I like my job but always wonder what I will do if I do not have one. I already have the answer ready. I want to write more for my blog and other blogs, spend more time with family, exercise more and cook at home more often. The amazing thing is that none of these require extra money. Just having thought of all this gives me pleasure. Thanks for posting the wonderful article.

As you’ve discovered, finding balance isn’t just about having more money. Sometimes it’s the chase for more that takes us out of balance. It’s great to know you’re already wealthy with time to invest in things you love.

I love turning your paycheck into a “playcheck.” That is a great way for people to think about it. Winning the money management project really is a game. You have to play with elements within yourself as well as the outside world. Thanks for the great post!

Leonard,
Count your blessings if you’re collecting a ‘playcheck’–They don’t come by accident, but by intentional pursuit and discipline to not get sucked into work that takes more from you that it gives to you. One question I ask people who are questioning their work, “How much is your paycheck costing you?”

I am 54 now. Will retire from my ‘real’ job in two years at 56. Manage the rentals for another 10 years, and then collect a small pension. I am going to be a snow bird for a few years between 56 and 65.

I totally agree with your thoughts on the personal finances. I’ve learned over time of research and mistakes that the get rich fast deals both good and bad eventually level out to be less then the slow and steady route. After the invlovment of my spouse into a company known as wfg(world financial group) that they offer plans that are on the slow and steady route. If I could start over i would just do that instead of risk it to win big but that is human nature right? Haha… If you have questions I’d be more then happy to tell you about my experience so you don’t have to experience it yourself. Keep up the good work!

THIS! Not the first time I’ve read the “retire TO something not FROM something” advice, but the concept of making a time account and “s-aging” is good stuff. I will retire, (as Hank used to say) “the good lord willing and the creeks don’t rise,” in 5 years with a generous pension and a (hopefully) robust 401k account at age 55. I’ve been taking steps toward certification for my second “career” as a rock climbing guide in order to make a small part-time living doing what I love to do. In this way, I can connect with others and share the love of this rewarding pursuit, mentor others along in the sport I love, and be in the places that make me the happiest. I am like Red in “The Shawshank Redemption,” in that “I find I’m so excited that I can barely sit still or hold a thought in my head.”

For long term planners, this may help you reach some goals. During the great bull market of the ’80’s – ’90’s, Franklin Resources (BEN) turned $1,000 into
$1,000,000 over an 18 year period (dividends and splits reinvested). (About 3 Xs what Berkshire Hathaway produced.) A few shares, held in a ROTH Ira consistently, with dividends and splits reinvested, held come h… or high water and you’re not looking back – may provide you with a very pleasant surprise in 20-30 years. BEN knows how to make money in down markets as well as up. Money managers often make more money than the stocks and accounts they manage. Eaton Vance (EV) and T. Rowe Price (TROW) also did exceedingly well over 25 years.

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My name is J.D. Roth. I started Get Rich Slowly in 2006 to document my personal journey as I dug out of debt. Then I shared while I learned to save and invest. Twelve years later, I've managed to reach early retirement! I'm here to help you master your money — and your life. No scams. No gimmicks. Just smart money advice to help you get rich slowly. Read more.

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